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Worthington Industries: What Investors Need to Know

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Investing in Worthington

The steel industry hasn’t been in the best of health over the last several quarters. Share prices of most steel producers are trading near 52-week lows. The SPDR S&P Metals and Mining ETF (XME), which is ~35% invested in steel plays, has underperformed the broader markets (SPY) since the start of 2015. Nucor (NUE) and Steel Dynamics (STLD) each make up 3.7% of XME.

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Series overview

In this series, we’ll present a complete business overview of Worthington Industries (WOR). We’ll discuss the key things you should understand before investing in Worthington. We’ll also look at how it’s a differentiated player in the steel industry.

Worthington stock took a beating in the last year, as you can see in the above chart. Later in this series, we’ll analyze the 2015 outlook for Worthington.

Background

Worthington Industries was formed 60 years ago and is headquartered in Columbus, Ohio. It’s a leading value-added steel producer in the United States. The company employs over 10,000 people at its 81 facilities. Its operations are spread across ten countries, so its business is geographically diversified. It’s also the second-largest purchaser of steel in the US, after automobile manufacturers.

The automobile industry is Worthington’s biggest customer segment. It derives more than one-third of its revenues from the automotive industry.

Worthington Industries operates three distinct business segments. We’ll discuss these in detail in our next part.

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